E-Supply Chain Technologies & Applications

EBC 6230 Winter Session 2014

Title : Business Intelligence in Supply Chain Management

Submitted to: Dr. Mohamed Baymout

Prepared by:
Conghui Chen (7455406) Kedi Zhao (7502703) Majidah Sulaiman Alshudukhi (7258166) Zhengyang Lu (6780414)

Agenda
2

Business Intelligence Introduction to Business Intelligence The basics of business intelligence Architecture of Business Intelligence Supply Chain Management Key Issues and Challenges in SCM Bullwhip Effect Business Intelligence in Supply Chain Management Business Intelligence in SCM Business Intelligence Technologies in SCM Business Intelligence Tools in SCM Taming Bullwhip Effect with Business Intelligence Case Study -- Bosch Automotive Product Conclusion

Introduction to Business Intelligence

3

A broad category of technologies,

applications, and processes for gathering, storing, accessing, and analyzing data to help its users make better decisions.
Make EvidenceBased Decisions

Define Objectives and Information Needs

More than Software Tools and

IT Infrastructure and BI Applications as Enablers

Collect the Right Information

Technology
Becoming an "Intelligent
Present and Communicate the Information Analyze the Data and Gain Insights

Company"

What is business intelligence used for

4

Organisations use Business Intelligence to:

Gain data-driven insights on anything related to

business performance
To understand and improve their performance

Cut costs and identify new business opportunities.

The basics of business intelligence

5

Business Intelligence Tools

6

OLAP (On-line analytical processing)

Advanced Analytics
Corporate Performance Management (Portals,

Scorecards, Dashboards) Real time BI Data Warehouse and data marts Data Sources

Business Intelligence Architecture

7

Kemper, H.-G., Baars, H., & Lasi, H. (2013). An Integrated Business Intelligence Framework. In Business Intelligence and Performance Management (pp. 1326). Springer.

Key issues in SCM

8

Demand planning

New or deleted products, competitors or market conditions, the aggregate demand plans and associated revenue plans

Increased competition and price pressures:

Reduce the cost: inventory management, logistics operations, material management and manufacturing costs Value- added services: RFID Labeling and packaging Drop shipping Collaboration
Share common operations, components or materials with other products
(1) Superior supply chain network design (2)outsource partner in the information chain (3) control mechanisms

Efficient PLC

Outsourcing

Bullwhip effect
9

http://www.youtube.com/watch?v=wLNdDSYqhNw

Bullwhip effect
Causes Demand forecasteach player projects the demand pattern based on what he or she observes. Order batching: accumulating the demand; Periodic ordering Price variations special discounts and other cost changes Rationing and shortage gaming: demand exceeds supply, a manufacturer often rations its product to customers.
10

Bullwhip effect
11

Consequences : 1. Inefficient production or excessive inventory 2. Low utilization of the distribution channel.

Business Intelligence in SCM

12

Nenad Stefanovic, Dusan Stefanovic. Supply Chain Business Intelligence: Technologies, Issues and Trends.

Business Intelligence in SCM

13

Areas of application Logistics and Operations

Activities Warehouse flows optimization Inventory planning Ordering and replenishment Transportation network management

Demand Management

Forecasting demand Price optimization & promotion management Bullwhip effect magnitude reduction Supplier analysis Information sharing with partners Support in procurement decisions Identification of new opportunities Uncertainty and risk management Supply chain re-engineering Enhancing relationships quality

Procurement and Suppliers Management Opportunity/ Risk Management

Business Intelligence Tools in SCM

14

Fall into three categories

Reporting Display usable information in a scorecard format
Real-time dashboards Provide a quick, daily overview of what is happening in their transportation or supply chain network Benchmarking Compare data on factors against peers - Freight rates, etc.

Taming Bullwhip Effect with Business Intelligence

15

Information Sharing in Supply Chain

Taming Bullwhip Effect with Business Intelligence

16

Use Electronic Data Interchange (EDI) to share data

with actors in all the Supply Chain

Set up models to assist decision making

Price Variations models Order Batching model

Leverage BI tools to analyze data sources better

Predict the demand more successfully

Bosch Automotive Products

17

(Suzhou)
Customer Logistics Planning (CLP) Department Light Tower Project

Challenges
18

OEMs behaviour is not mature Automotive Electronics (AE) department is

an upstream supplier
AE was suffered a lot from order fluctuation
Fluctuation is often amplified due to bullwhip effect

Objectives
19

Reduce negative impact caused by bullwhip effect

- Increased GEZ (GesamtEindeckungsZeit meaning Total Coverage Time)

- Over planned capacity

Improve reliability of forecast

- Predict future fluctuation trend - Provide early warning

Solution
20

Get data from different sources Build a predictive model based on data Implement the predictive model with a BI system Apply results to supply chain management

Data sets
21

Actual Data

Forecasting data

RBPartActualDelivery

DirectCustomerForecast

OEMActualCarProduction OEMCarProductionForecast OEMActualCarSales OEMCarSalesForecast

For each type of part: RBPartActualProductionVolume = ActualCarProductionVolume * Usage * Rate RBPart_UsageRate RBPN Car Usage Rate

Data Relation
22
OEMActualCarSales OEMCarSalesForecast
CarID CarSalesForecastMonth CarSalesForecastVolume CarSalesForecastVersion

CarID ActualCarSalesMonth ActualCarSalesVolume

OEMCarProductionForecast
CarID CarProductionForecastMonth

OEMActualCarProduction
CarID ActualCarProductionMonth ActualCarProductionVolume

Car
CarID CarName OEMID

CarProductionForecastVolume CarProductionForecastVersion

OEM
OEMID OEMName

DirectCustomer
DirectCustomerID DirectCustomerName

RBPart_UsageRate
PartID CarID Usage Rate Price

DirectCustomer_OEM
DirectCustomerID OEMID

RBPart_DirectCustomer
PartID DirectCustomerID

RBPartActualDelivery
PartID RBPartDeliveryMonth RBPartDeliveryVolume

DirectCustomerForecast
PartID DirectCustomerID CustomerForecastMonth CustomerForecastVolume CustomerForecastVersion

RBPart
PartID RBPN MiFa Product

Data Analysis and Predictive Modeling

23

R1 = f (RBPartActualSalesVolume, RBPartActualProductionVolume) R2 = f (RBPartActualProductionVolume, RBPartDeliveryVolume)

R3 = f (RBPartSalesForecastVolume, RBPartProductionForecastVolume)
R4 = f(RBPartProductionForecastVolume, CustomerForecastVolume)

R
R1 R2 R2 R4

Weight
4 6 1 6

Data Analysis and Predictive Modeling

24

Score = f (R)

V=f (Score, Weight)

Increase = f (R,V) Decrease = f (R,V)

Conclusion
25

BI upgrades the quality and timeliness of data and

helps in decision making process.

BI improves reliability of forecast and reduces

uncertainties in supply chain and helps tame the

bullwhip effect.
Implementation of BI system with effective tools is

critical in whole process of SCM.

26

Thank you!

References
27

Hau Lee, V Padmanabhan, and Seungjin Whang. 1997.The Bullwhip Effect In Supply Chains. Sloan Management Review Six Key Trends Changing Supply Chain Management Today. 2009 .Hitachi Consulting Corporation . http://www.hitachiconsulting.com/files/pdfRepository/WP_SCMTrends.pdf Isabella Maggioni, Francesca Ricciardi. Business Intelligence for Supply Chain Management: Trends from Scholarly Literature and from the World of Practice. 2012. Information Systems: Crossroads for Organization, Management, Accounting and Engineering, pp 287-294 Nenad Stefanovic, Dusan Stefanovic. Supply Chain Business Intelligence: Technologies, Issues and Trends. 2009. Artificial Intelligence an International Perspective, pp 217-245 Amy Roach Partridge. Business Intelligence in the Supply Chain. April 2013. Inbound Logistics. http://www.inboundlogistics.com/cms/article/business-intelligence-in-the-supply-chain/ Jeff Moad. BI Tools Boost Supply Chain Excellence, Study Finds. March 19, 2010. Managing Automation. http://www.managingautomation.com/maonline/exclusive/read/BI_Tools_Boost_Supply_Chain_Excellence__Study_Finds_27 756148 What is the Bullwhip Effect? Understanding the concept & definition. April, 2, 2012. Logistics & Materials Handling Blog. http://www.aalhysterforklifts.com.au/index.php/about/blogpost/what_is_the_bullwhip_effect_understanding_the_concept_de finition Ranjan, J. (2009). Business intelligence: concepts, components, techniques and benefits. Journal of Theoretical and Applied Information Technology, 9(1), 60-70. www.jatit.org Negash, S. (2004). Business intelligence. Communications of the Association for Information Systems, 13(1), 177-195. Lnnqvist, A., & Pirttimki, V. (2006). The measurement of business intelligence. Information Systems Management, 23(1), 32.